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IMF ends monopoly on top post

Managing director post, customarily given to Europeans, to be open to all nations.

Tue Jul 10 2007 04:42:41 GMT+0000

Rodrigo Rato, the IMF's managing director, will step down in October [EPA]

Balance of power

Many developing countries had challenged the custom whereby Europeans head the IMF and an American leads the World Bank.

They argued that it no longer reflects the true balance of economic power since the rise of countries such as China and India.

There is no rule that the head of the IMF, currently Rodrigo Rato, must be from Europe, but in practice the role has always gone to a European since the inception of the organisation in 1945.

The US indicated last week it would not challenge Europe's grip on the IMF captaincy since it had just picked Robert Zoellick, an American, for to lead the World Bank.

Sarkozy bid

Earlier on Monday, Nicolas Sarkozy, the French president, launched a drive to nominate Dominique Strauss-Khan, the former socialist finance minister, to run the IMF.

Strauss-Khan, 58, an advocate of social democratic economics, also won the backing of Jean-Claude Juncker, the chairman of the 13-nation euro zone, to succeed Rato, who steps down in October.

In 2004, Britain demanded a transparent selection process for the job amid a Franco-German deal that backed Jean Lemierre, a Frenchman who now heads the European bank for reconstruction and development.

Rato, who had the backing of Britain and the US, was eventually chosen for the job after Mohamed El-Erian, a former senior IMF official, was nominated as a second candidate by Shakour Shaalan, an IMF Egyptian director.

Brown backing

Britain backs the view that the post does not necessarily have to be filled by a European.

Gordon Brown, the UK's new prime minister, formally resigned as chairman of the IMF's policy-setting committee on Monday.

In a letter to the IMF board, Brown said: "The UK will support an open, transparent and meritocratic process for selecting the next managing director."

As chairman of the IMF committee, Brown had led a grouping of 24 finance ministers or central bank governors in advising on IMF issues and the functioning of the global financial system.